Hospitals in the 340B drug pricing program have traditionally measured success through compliance and cost savings. The next era of the program will require something more: demonstrating measurable improvements in quality, patient outcomes, and audit readiness. The US Department of Health and Human Services (HHS) is signaling support for rebate-based mechanisms and industry leaders anticipate that the Centers for Medicare and Medicaid Services (CMS) could assume greater regulatory responsibility for the 340B program.1 Participants must move from reactive compliance to proactive quality alignment.2
Familiar barriers emerge concerning staff training, third party administrator (TPA) integration limitations, patient confusion around medication therapy management (MTM), and non-standardized workflows for drugs such as radiopharmaceuticals. Operational challenges are increasingly compounded by evolving manufacturer restrictions, emerging rebate-based models, and rising expectations for data transparency.3 Hospitals must therefore build internal processes that support consistent documentation, reliable eligibility determination, and clear audit trails across the entire medication-use process. The future of 340B will not be defined by compliance alone; it will be defined by how effectively pharmacy programs improve quality while demonstrating compliance.
Redefine What It Means to Be Ready for the Next Phase of 340B
In a rebate-driven, National Drug Code (NDC)-level environment, hospitals should anticipate increasing claims-level scrutiny across the drug lifecycle as federal drug payment and rebate programs require detailed claim identifiers, NDC reporting, and reconciliation between dispensing, billing, and rebate submissions.4 This means aligning dispensing records with the current patient definition in real time; ensuring the use of 340B drugs for Medicaid patients is accurately reflected in billing logic and aligns with carve-in or carve-out designations reported to state Medicaid programs and the Health Resources and Services Administration; and creating digital audit trails for each transaction, not just sample-based reviews.
Electronic health records (EHRs) need to have customized encounter logic, tagging protocols that identify eligible encounters, prescribing providers, dispensing locations, and audit trails to support 340B. Integrating pharmacy, compliance, and information technology is critical. Do not assume TPA or EHR vendors will fill in the gaps. Covered entities should proactively customize their systems and workflows to produce reliable, defensible data before increased oversight demands it.
If oversight transitions from HRSA to CMS, hospitals should anticipate increased reliance on submitted claims data, encounter documentation, and system-level audit trails to determine compliance.4,5 HRSA audits focus on documentation demonstrating compliance with program requirements, whereas CMS oversight models typically rely on structured data validation processes such as those used in Risk Adjustment Data Validation audits.
Hospitals should therefore ensure their operational workflows generate reliable, defensible data that accurately reflects eligibility determinations and medication dispensing activity. In short: unlike HRSA, which currently oversees the 340B program for HHS, CMS will not ask what was intended; they will ask what the data proves.4-6 Even the most sophisticated systems can only produce reliable data if they are routinely validated through proactive audits and supported by knowledgeable staff.
Although proactive internal audits and documentation can prevent costly errors during HRSA reviews, an educated staff is equally important to identifying errors ahead of time. Even without mandatory training requirements, you can find creative ways to educate staff. Simplified job aids, 1-on-1 mentoring, and peer-led group reviews help close critical knowledge gaps for analysts, pharmacy buyers, technicians, executive leaders, and other staff whose responsibilities intersect with 340B program operations.
Finally, do not make assumptions about court decisions: confirm any conclusions with legal counsel. Some decisions, while informative, may have no binding application to every type of 340B covered entity. Additionally, use caution when applying interpretations of court decisions as a basis for eligibility, such as interpretations that emerged following the Nov. 3, 2023, ruling in Genesis Health Care Inc. v. Becerra.7
MTM Services Support Broader Quality Goals
MTM is a pharmacist-led service that optimizes therapeutic outcomes through comprehensive medication reviews, improving patient safety and reducing adverse drug events. MTM should not be viewed as a mechanism for establishing 340B eligibility. Rather, it strengthens medication management, care coordination, and documentation for prescriptions that already meet HRSA requirements. MTM services may be promoted to patients as a medication management resource, but they do not replace compliance requirements or alter eligibility determinations under HRSA’s patient definition.8
MTM services, which are commonly targeted toward patients experiencing polypharmacy, can also support CMS Hospital Compare and Star Ratings and Healthcare Effectiveness Data and Information Set (HEDIS) outcomes when implemented within programs focused on specific chronic disease populations. As regulations change, showing the value of MTM services supported by the 340B program will become crucial for health care systems.
A blueprint should be created with the collaboration of hospital medical and quality leadership for alignment with metrics like CMS Hospital Compare measures and Star Ratings, HEDIS scores, and value-based purchasing programs. Reporting carefully selected chronic disease population outcomes will be essential for hospitals preparing for CMS-style audit rigor tied to quality-based reimbursement.
When implemented correctly, MTM services can provide clear, auditable documentation while also supporting CMS-aligned quality measures. These programs may help improve processes such as medication reconciliation during transitions of care, strengthen adherence to chronic disease therapies, and potentially reduce 30-day readmissions.8,9
As CMS moves toward outcomes-based reimbursement and ties more dollars to abstracted and electronic measures in inpatient and outpatient HEDIS scores, these services become strategic levers. Clinical pharmacy programs can therefore help bridge the clinical–financial gap by aligning medication management with patient safety initiatives and measurable population health outcomes, demonstrating value within emerging value-based care models.10
This is not about checking a regulatory box. It's about embedding pharmacy and pharmacists into the care continuum in a way that directly improves quality scores, protects reimbursement, and positions the hospital for success in a more data-driven and compliance-focused regulatory environment.
About the Authors
Thomas Creamer, MBA, 340B ACE, is 340B program manager at Salinas Valley Health in Salinas, California.
Aniko Kukla, DNP, RN, CPHQ is director of adult patient safety at University of San Francisco Health in California.
Abhi Mehta, PharmD, MS, MBA, is a medication safety officer at Salinas Valley Health in Salinas, California.
The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policies or positions of their employer or affiliated organizations.
Building quality into 340B requires more than technology alone. Organizations should establish multidisciplinary governance that includes pharmacy, compliance, information technology, finance, and quality leaders. Pilot pharmacist-led medication management services within a defined patient population, standardize documentation and staff education, and ensure billing, eligibility, and patient communication processes are aligned before expanding the program.
Final Thoughts
340B is no longer just about savings on discounted drugs; it is increasingly about integrated, value-based health care delivery. As oversight trends point toward a possible shift from HRSA to CMS, hospitals should anticipate greater scrutiny and tighter audit expectations like those seen in CMS hospital regulatory and quality reporting programs.
Although the 340B program itself is established by law and unlikely to disappear without major legislative change, its future will demand greater transparency; stronger integration between EHR, pharmacy, and billing systems; and measurable value to patients. Hospitals that build quality into their 340B programs today will be best positioned to thrive in tomorrow's reimbursement and regulatory environment.
REFERENCES
Federal judge affirms HHS authority over 340B rebate models: a win for community health access. American Exchange. June 17, 2025. Accessed August 5, 2026. https://americanexchange.com/hhs-340b-rebate-models-ruling/
Nikpay S, Halvorson L. Growing administrative complexity in the 340B program and the rise of third-party administrators. Health Affairs Scholar. 2023;1(5):qxad052. doi:10.1093/haschl/qxad052
Program integrity. Health Resources & Services Administration. Updated July 2026. Accessed August 5, 2026. https://www.hrsa.gov/opa/program-integrity
Chisholm-Burns MA, Lee JK, Spivey CA, et al. US pharmacists’ effect as team members on patient care: systematic review and meta-analyses. Med Care. 2019;48(10):923-933. doi:10.1097/MLR.0b013e3181e57962
